Employees’ Provident Fund is a social security scheme that helps employees save a small portion of their salary for future benefits.
Every company has to offer its employees an EPF or Employees Provident Fund which is akin to a retirement fund. EPF comes under the purview of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. EPF registration is mandatory for organizations with total employee strength more than 20. Such employers can opt for online PF registration from Vakilsearch. Companies can register for employee provident fund, in 3 easy steps:
To be eligible for PF Registration, an organization has to fulfill the following criteria:
Companies with less than 20 employees (Note: Such companies must issue a notice to the Employees’ Provident Fund Organization in 2 months or less than that)The employer and the employees of an establishment must mutually agree to apply for PF to the Central PF Commissioner. A notification has to be sent to the Official Gazette from the date of the agreement.
Every employee is eligible for PF right from the beginning of his employment. The responsibility of PF contribution and deduction is of the employer’s.
Besides the contribution of the employee to EPF, the employer adds an equal amount which is inclusive of Employee Pension Scheme (EPS). Therefore, EPF saves you a robust pension.
In case of instances like illness, demise or retirement, Provident Fund helps the dependents of the employee by covering the financial risks they face in such situations.
The PF account can be transferred while switching jobs. Universal Account Number(UAN) linked to the Aadhar will start to facilitate the linking of the previous accounts. It can be carried forward to the new employer instead of being closed down. This uniformity ensures that the rate of return is compounded over the years.
Emergencies are bound to happen at any point of time in life. EPF amount can be of great help during mishaps, illnesses, weddings and educational expenses. Employee can make claims online.
Any person who has PF account is eligible for this insurance scheme that requires only 0.5 % of the salary deduction as premium.
The PF account can be extremely helpful for long-term goals like buying a property or setting up a fund for children.